Written by Keith McCambridge, talent consultant at Wickland Westcott
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The accountability of UK boards has been called in to question in recent times, partly as a result of current market conditions. Both internal and external stakeholders are now demanding greater transparency in the boardroom, so how can manufacturers determine board performance and efficiency and, if there are issues, how can these be addressed?
Taking an objective view
One of the most important considerations when assessing board performance is objectivity, and a board evaluation, which involves a thorough assessment of processes, personalities and group dynamics, is a good place to start. The assessment of senior figures within a company can be an uncomfortable and emotionally-charged process, so bringing in an external assessor helps to ensure that any conclusions and recommendations are based purely on the needs of the business and not on a political agenda.
External consultants are also better placed to drive open and honest discussion and to pose those challenging questions, which are critical to business but may not otherwise be asked.
Process vs. behaviour
Traditionally, board evaluations have been based on mechanics, involving the use of questionnaires and checklists to determine what’s working and what isn’t. However, these tick box exercises are intrinsically black and white in terms of outputs, and overlook key performance indicators such as behaviour and team dynamics. An insight into boardroom relationships is essential, as this ultimately affects performance a great deal more than any business process.
The most successful evaluations will take note of board level procedures, but place greater emphasis on assessing behaviour in order to get a true picture of the strengths and weaknesses of individuals, and to understand how they operate as a team.
Friendships in the boardroom
A common misconception is that in order for a team to work effectively, it must comprise people who know each other well and get on with one another, based on the reasoning that the closer the team, the higher the levels of trust and performance.
While there is an element of truth in this, there is a definite tipping point where mutual respect and understanding turn into deep friendship, and this can create a tendency to take shortcuts and be more presumptive.
Although it may seem counter intuitive, over-familiarity can be a real hindrance when it comes to considered decision making, and this is particularly true of the relationship between a CEO and Chairman. One of the main roles of the Chairman is to evaluate the performance of the CEO and to question business decisions, so a cosy relationship has the potential to seriously inhibit the level of challenge required to ensure high performance.
To demonstrate the importance of professional relationships, we only have to look to the aviation industry as a prime example. When drawing up rosters, airlines make a conscious decision to pair up crew members who are more strangers than friends, as evidence shows they are less likely to challenge each other’s decisions and follow the right procedures if the two are well known to each other.
Challenge must be uncluttered by personal relationships and, in the case of the flight deck, even by authority. The First Officer, for example, has the power to take control of the aircraft if he or she thinks it is being flown unsafely. Sadly, there have been occasions when this has not happened because the First Officer feels uncomfortable questioning the Captain. This is just as applicable to the boardroom as it is to the cockpit - it is vital to foster a culture that allows for challenge to all members of the board, and that includes the Chairman.
There is no doubt that these are tough times for manufacturing, an industry which was once the bedrock of British enterprise, and in many ways remains so. There is a real need for considered decision making among those at the top, in order to drive the sector forward and ensure future success.
A high performing business begins with a high performing board. The key is to establish and maintain a team dynamic based on mutual respect and understanding, but which retains the necessary level of professionalism to ensure that decisions are questioned and that no one person has the unspoken authority to override the others in the room.
About Wickland Westcott:
Operating from offices in London, Cheshire and Yorkshire, Wickland Westcottis a leading search, talent and career consultancy, specialising in high level recruitment and talent development across all sectors and disciplines.
The company works with the UK’s leading brands to recruit at the highest level andoffer the highest quality assessment and development services to improve talent.